UBS is launching a new alternative investment management business, Dillon Read Capital Management, under the leadership of John P. Costas as CEO.
Costas, currently Chairman and CEO of UBS's Investment Bank, will lead thei s new business as CEO. Dillon Read Capital Management will form part of UBS's Global Asset Management business led by Chairman and CEO John Fraser.
Costas will leave UBS's Group Executive Board at the end of 2005. He will remain as non-executive Chairman of its Investment Bank.
This new initiative will see UBS's Principal Finance and Commercial Real Estate trading businesses move from the Fixed Income, Rates and Currencies area of its Investment Bank to form the core of the new unit within the Global Asset Management business.
Mike Hutchins, currently Global Head of Fixed Income, Rates and Currencies, Investment Bank will be appointed President, Dillon Read Capital Management. Approximately 120 staff will transfer, mainly based in New York. Subsequently, the trading strategies managed by the team will be opened up to co-investment from sophisticated, principally institutional clients, and will be supplemented by further new offerings.
UBS intends to build a new stream of investment management fees from what has until now been a purely in-house trading activity. UBS will retain its current direct investment in the relevant trading portfolios, with any incremental future investments subject to UBS's usual risk management processes. This new business is similar in concept to other successful alternative asset management units within UBS, based on trading strategies developed within UBS's Investment Bank.
Huw Jenkins, currently head of the Equities business, will succeed John Costas as CEO of UBS's Investment Bank, based in London. He will become a member of the Group Executive Board from 1 July 2005. Prior to running UBS's world-leading equities business,Jenkins built its US equities franchise into a significant market force.
Dillon Read Capital Management will be launched on or around 1 January 2006. All management changes concerning UBS's Investment Bank are effective 1 July 2005.
Before becoming CEO of UBS Investment Bank in December 2001, Chairman in September 2002 and Deputy Group CEO in May 2004, Costas was the President and Chief Operating Officer of UBS Warburg. He served from 1996 to 1997 as Head of US Fixed Income and Derivatives at UBS, becoming Global Head of Fixed Income at Warburg Dillon Read in 1998. In 1999, he also took over the position of Chief Operating Officer for UBS Warburg, and became a member of the Group Managing Board. Before joining UBS in 1996, Costas worked at Credit Suisse First Boston as Co-Head of Global Fixed Income. John Costas was born in 1957. He is a US citizen.
Costas said: "I am terrifically excited to have this entrepreneurial opportunity to build a new business within UBS. Investors have huge appetite for alternative investment products backed up by the quality assurance of a global financial leader - we can fulfill that demand. I am proud of what we have achieved in building UBS's Investment Bank into a world leader, and am confident that Huw (Jenkins) can build on our current momentum."